Bullish Reversal Day | Market Averages Close Strong

An impressive bullish reversal day for the stock market averages. One day of trading usually doesn’t get me excited but we had equally impressive volume in the SPY (almost 172 million shares).

It can be challenging to find a bias to trade with conviction in this tape, and there is good reason for it. Run a scan on both sides of the trend. You will see an equal amount of ideas. This means neither the bulls or bears are in charge.

When the market bias is this neutral it is crucially important to put together a solid pre market game plan.

Yesterday was a unique trading lesson. One that would be a heated discussion on Stone St, down town NYC. Do you buy weak stocks that have reversed on the day?

I say no.

Stock Market Today: Map of the S&P 500

(click the map for a full view)

Bullish Reversal Day

Day Trading Game Plan: The SPY ETF Chart

SPY bullish reversal yesterday was very impressive. You had to love everything about it. Great volume too. Lets see if we can get follow through today.

(click the chart for a full view)

Bullish Reversal Day

Stocks to Trade | Thursday August 13, 2015

Pete’s Notes:

  • Oil and gas continues to hold the bid.
  • Financials reversed higher but still look weak as a group.

Charts in Focus

The Home Depot, Inc. HD

Home Depot has been flirting with $118 and multi year highs for about ten days now. Buying the breakout on a price-cross has got early bulls slapped around but I still over the trade if it can trade above and close above that level.

(click the chart for a full view)

Bullish Reversal Day

Earnings in play today > 1M avg shares:  AAP, COTY, JWN, KSS, PAH, XHR, YY

Bullish Ideas ATR/Volume/Price: NFLX, GOOG, GOOGL, HFC, AMZN, TSO, UA, VLO, NEE, ACN, EA, HD>118, MA, PSX,

Bearish Ideas ATR/Volume/Price: wll, yelp, qrvo, gmcr, myl, juno, rrc, uri, bidu, dvn, woz, sina, cern, utx, baba, hot, cvx, grun, isis, cat, nsc, mmm, xom, unp, m,

Weak Stock Weak Close: bidu, cma, coh, fit, m, myl, tasr

Strong Stock Weak Close: BAX, JBLU

Weak Stock Strong Close: wll, qrvo, yelp, rax, uri, dyn, mur, paa, pwr, hbi, cop, nbl, kmi, ete, cvx, ir, aapl, symc, grub, isis, nrg, scty, cat, adm

Strong Stock Strong Close: TE, NVDA, CCE, MDLZ, ED, ATVI, HOLX, JNPR, D, NEE, CMS, TMUS, PFE, PSX,

20 day Breakdown: bac, jd, c, wfc, m, yum, bidu, pot, ctrp, etfc, cybr, sti, agn, cma

20 Day Breakout: HCP, KR, SYY, PHM, OXY, SO, CREE, DHI, APC, PEG, PCG

2x Normal Volume: AAPL, BABA, JD, YHOO, DIS, M, COP, GPRO, YUM, HCP, BIDU, SYMC, COH, CNQ, SYY, CREE, RAX, CF, KSS, HCN, SCTY, AEM, TEX, CYBR

Watch List Longs: MO, VLO, TJX, JNPR, ADBE

Watch List Short: cop, cvx, bby, all, xom, adm, dow, dd, wynn, hpq,

Inside days: rax, amt, pld, gmcr, rai

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Bullish Reversal Day | August 13

Nasdaq, S&P 500 Close Higher After Impressive Rebound

After an impressive rebound, the broad indexes closed slightly higher Wednesday. The Nasdaq composite climbed 0.2% after being down as much as 1.8%. The composite mirrored a rebound in Apple (NASDAQ:AAPL) shares, which closed up 1.5%.

The S&P 500 advanced 0.1%. The Dow Jones industrial average was a fraction lower. The small-cap Russell 2000 fell 0.1%.

Volume rose sharply on the major exchanges, according to early data. Winners and losers were about even on the NYSE while declining stocks led advancers by 9 to 7 on the Nasdaq.

The energy sector led as crude prices rose modestly. Utilities continued to outperform: The Dow utilities added 1.5%.

Continue reading on news.investors.com

Stocks rebound from big losses, close higher

U.S. stocks staged a rebound in late trading Wednesday as the major indexes climbed back from sharp early losses and closed mostly higher.

Stocks initially tumbled as anxious investors grappled with the the ripple effects caused by a further devaluation of China’s currency and rising concerns about the health of China’s wobbly economy.

But after a sharp knee-jerk reaction to the downside, investors apparently are starting to question whether China’s move to devalue its currency is the start of a full-fledged currency war.

“I think the term is overly dramatic,” says Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “I don’t believe other countries will respond to this in a dramatic way.”

Skrainka also points out that China’s 2% devaluation of the yuan Tuesday and a further drop today is “not a major deal” from a historical perspective, especially given that the U.S. dollar has already seen a roughly 30% rise in its current rally.

Continue reading on usatoday.com

 

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Leave a Reply 4 comments

Passion4Trading Reply

Hi Pete.

Curious if you are familiar with the inner workings and context that Market Profile provides?

If you are– you will gain an awareness of some very valuable insight…and realize that the market’s daily candlestick chart and volume can be very very deceiving… and in essence… “not all that appears to be”.

If you think in terms of price fluctuation…whether it be drastically up or down– a key point to remember: TIME AND VOLUME NEED TO CONFIRM PRICE. If they do– then PRICE IS CONFIRMED AND ACCEPTED.

The reality is– yesterday– despite what appears to be a large “buying tail” on volume…and a very single “bullish” candlestick…that is not the case AT ALL. Value did NOT rise…despite price doing so. This means very short term players have driven this market up yesterday… simple short covering. This is not just a guess or assumption…because the bell curve distribution picture clearly shows that the MOST VOLUME…as well as the MOST TIME– was spent at far lower prices. A strong close in price CANNOT BE CONFIRMED AND ACCEPTED..its impossible at this time.

If you want to take your game to the next level and discover TRUE EDGE like youve never imagined was possible…I strongly consider you invest your time in learning market structure through the lens of market profile that is IMPOSSIBLE to discern through candlesticks.

    Passion4Trading Reply

    One point that I left out that is the MAJOR RED FLAG at present:

    Despite price rising… VALUE DID NOT. If you had a gun to your head and were told to look at ONLY ONE THING as a basis for your trade decision making and assessment of where the market is going next…. FOLLOW VALUE…NOT PRICE. VALUE truly tells us where market is headed…NOT PRICE.

    Pete Renzulli Reply

    Hi Lou
    thank you for the post
    always nice to see how other traders view the market.
    Nice to see you have conviction in your method.

    have a great day.
    Pete

Passion4Trading Reply

And incidentally– in case you think Market Profile is simply yet another “strategy”…it is MOST CERTAINLY NOT AT ALL.

It provides however the SINGLE MOST TRULY IMPORTANT ASPECT NECESSARY FOR HIGHEST ODDS OF SUCCESS IN ANY TRADE DECISION:

CONTEXT
CONTEXT
CONTEXT

Did I mention…. CONTEXT?

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